Chief Executive Officer & Director, United Airlines Holdings Inc
United Airlines CEO Scott Kirby Discusses Industry Challenges
At The International Air Transport Association in Rio De Janeiro, United Airlines CEO Scott Kirby discussed with Co-host of Bloomberg Surveillance Lisa Abramowicz the current challenges facing the airline industry including rising fuel costs and their impact on ticket pricing.
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About J. Kirby
United Airlines CEO Scott Kirby said in July 2026 that the company had navigated a $6 billion increase in fuel costs compared to its expectations at the start of the year, and that the airline was raising its guidance and had "a shot at growing earnings on a year over year basis." He described travel demand as "incredibly strong" and said the company had implemented multiple fare increases, with another occurring that week. Kirby stated that airfares in real terms remained about 13% below pre-COVID levels, and that the airline's overall cost base—including airport fees, maintenance, and labor—had risen more than fuel prices. He attributed the company's performance to the "United Next" strategy and the work of United's employees. Kirby also discussed industry challenges, including engine supply constraints that he said would hold back aircraft deliveries for at least five years. He said United had ordered excess aircraft in anticipation of such problems. On the topic of a potential merger with American Airlines, Kirby said he believed it would be "great for customers" and would help build "the best airline in history," but acknowledged that the idea had generated a strong reaction and that such a deal would require a willing partner. He also expressed interest in expanding United's international network, noting that international routes had performed well for the airline.
Transcript (36 segments)
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David Westin0:00
Go back to Rio De Janeiro now. That's where our colleague Lisa Abramowitz is, of course, co-host of Bloomberg Surveillance. She's sitting down with the CEO of United Airlines, Scott Kirby. Lisa, take it away.
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Lisa Abramowitz0:10
Thank you so much, David. I am here still in Rio with Scott Kirby, the CEO of United Airlines. Scott, always wonderful to speak with you.
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Scott Kirby0:17
Great to be here, Lisa.
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Lisa Abramowitz0:17
Thank you for being here. I was actually surprised by the tone here, and I shouldn't be surprised because every conversation I have with different executives in the airline industry, things are better than expected. Demand's actually picking up. It's been more resilient. This summer's gonna be a record summer. You're hearing the same thing. Is that kind of your tone as well?
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Scott Kirby0:31
A lot of questions for people around the globe really, because we're a US airline, obviously, like, what do you think is gonna happen in The Gulf? And people are worried about oil prices, but demand, certainly US anything related to US, feel strong. I think there are other parts of the globe that maybe are a little more concerned about demand, but really strong in The US and mostly strong around the globe. And people have the view that, you know, that hope that this gets resolved at some point, and that we're back on track to what was looking to be a really good year to start the year.
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Lisa Abramowitz0:59
Where are you seeing demand kind of fizzle around the world or at least fade just a touch in response to higher prices?
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Scott Kirby1:04
You know, we don't really see it at United because so you know, 80% of our traffic, even international traffic, is US point of sale. But you can, I think, see starting to see the glimmers that Asia is the first place. The impact of oil and refinery issues in Asia have been the worst. And I think Africa, certainly Middle East, has had an impact. So you can, I think, sense some worry, not really evidence of weakening of demand, but you talk to people in one on ones, you get some concern that if this goes, you know, sort of in the standard line all along. If this goes till July, it's gonna be a problem in March. If this goes into April, it's gonna be a problem. And it keeps getting pushed down the road, fortunately, because demand stays strong.
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Lisa Abramowitz1:47
Well and so so far, you've raised prices about 20%. Cut capacity about 5%. Is that enough? You anticipate more price increases and more capacity limitations?
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Scott Kirby1:57
You know, time will tell. Depends on what's happening with the economy, what happens with oil prices. But I feel pretty good about where we are right now. You know, we laid out a path to getting to a 100% fuel recovery. It certainly looks like we're still pretty much solidly on that path. And oil even though oil has come down a little slow, actually, we'd move it a little earlier from when we said it. But we feel pretty good about where the demand environment is, and the consumer has been resilient even with fares up. But in truth, fares are up 20%, but they're still in real terms lower than they were in 2019. So air travel remains by far the best value as part of the travel chain and have been pleasantly surprised with the resilience of the consumer so far.
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Lisa Abramowitz2:37
Is it all driven by the premium consumer who seems to be insatiable, or is it really across the board?
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Scott Kirby2:41
You know, I always talk about it, at least at United, we're investing nose to tail for our customers. And most of the things that we're doing for the product apply to everyone. Seatback entertainment, Starlink on every aircraft, great new interiors applies to everyone. And the premium has been stronger for a couple of years. It's still a little bit stronger, but it's pretty hard to, I think it's been strong across the board for us. But we skew to the high end. Even the economy pastures are skewing towards the top end of that K curve for air travel. International, of course, skews even higher. But we really haven't seen any noticeable cracks in demand sort of anywhere in the cabin.
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Lisa Abramowitz3:22
I know you've been upgrading all your planes quite considerably. Nose to tail, whether it's the fold down seats to have you sleep across. Especially if you've kids. I wish that I'd had that one. Anyway, moving forward. Moving along. Do you find that it's difficult to upgrade as quickly as you want because of just some of the delays and deliveries that we're seeing in certain of the aircraft manufacturers?
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Scott Kirby3:41
You know, we got ahead of it. We started ahead. We ordered a lot of aircraft. We got ahead of the supply chain, as being the first, really back during COVID. We anticipated problems, so we actually over ordered because we anticipated problems. The problems have been bigger than we thought, but we've mostly managed through those, and seat manufacturing. Seats are a big issue across the industry. We've mostly stayed ahead. We've been somewhat impacted by it, but we've mostly stayed ahead of that. Even Starlink, for example, we're gonna have the whole fleet done, we expect, next year. It can't be done fast enough, but by being the first big airline to order, we're at the front of the queue. And so most of the things we're doing because we're at the front of the queue, we're much less impacted than other competitors around the globe.
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Lisa Abramowitz4:26
There were reports that you were talking about Rolls Royce a couple of minutes ago, talking about how they've been a problem in terms of just honoring contracts. And what exactly is the role in some of the delays that we're seeing, particularly with Airbus?
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Scott Kirby4:39
Well, engines are really the issue. I think they're gonna constrain supply around the globe for probably the next decade. There's not enough engine capacity. There's something like 900 aircraft around the globe that are grounded right now that should be flying because they don't have engines that can fly. And it's a real, it's not an easy problem to fix, and it's gonna take time. And so, really, we need all the engine manufacturers. And the forgings and castings that go into the blades, the engines are really, I think, the biggest constraint. And that takes time to fix. When we start fixing that, all the aircraft that Boeing and Airbus, they're gonna be able to produce a lot of aircraft, I think. They're both starting to get things on track for producing aircraft, but they're gonna be producing gliders. It's just not enough engines.
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Lisa Abramowitz5:25
Well, gliders are not gonna fly for the industry quite literally. I cannot imagine that, trying to have long haul flight on a glider. Do you think, though, that Rolls Royce has been a bad actor or not as much of a good actor relative to, say, some of the others that have been ramping up.
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Scott Kirby5:39
Well, that's certainly been our personal experience, with United at Rolls, and that's what I hear from others around the industry too.
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Lisa Abramowitz5:47
Is that constrained to Airbus deliveries more than Boeing?
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Scott Kirby5:50
You know, they both have constraints. Rolls has been constrained. Pratt and Whitney has had a lot of well publicized challenges. By the way, I respect Pratt and Whitney is working really, really hard to fix them, and that's all you can ask, really. GE is doing the best of the engine manufacturers, but all of them have had challenges.
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Lisa Abramowitz6:09
Going forward, it seems like all of the airlines are trying to upgrade as quickly as they can because it is going to be about the experience that you're delivering to the customer that's gonna determine. How much have you seen the pressures kind of come into play, the sort of pressures in the industry that you had been expecting as a result of some of the higher prices?
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Scott Kirby6:27
Well, I think we're the ones creating pressure, to be honest with you. We're investing more than anyone, and we're doing the kinds of things really that no one has ever done, whether it's the relaxed pro here in The United States, putting Starlink on every airplane, but also the technology. Like, you use the United app. It is materially different than I don't know who has the second best app in the world, but they're way behind United. And we're just doing more and more of that. And it just changes how it feels to fly, and it's remarkable. That's how you win brand loyal customers. We change the whole experience. It's not just about the route network. It's about the technology, the service, the reliability, and the product. And you gotta focus on all four of those. You gotta have all four of those things to win customers, and it's been working really well at United. We're just continuing to push to find ways to invest more and more and more in new creative ideas, to make people think, hey. It's cool to fly United.
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Lisa Abramowitz7:18
Are you still thinking about consolidation in any form?
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Scott Kirby7:21
Well, everyone's asking me about it.
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Lisa Abramowitz7:23
So you're still thinking about it?
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Scott Kirby7:24
I'm trying to take it off the table.
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Lisa Abramowitz7:25
Yeah. But we're putting it back on. So here it is. It is still on the table for you.
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Scott Kirby7:29
You know, I said it at a conference last week. I kinda came, for the last couple of years at least, thought that a big kind of transformative deal to take create a great US airline that could compete around the globe was really where the opportunity was. And but I've always known that that would have required a willing partner, and we don't have one. So I think it means that United is likely sitting out the consolidation game.
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Lisa Abramowitz7:56
Meanwhile, going forward, we got the best jobs report in a long time on Friday, and a lot of it was driven by leisure hiring. We heard that across the board. How much of this is coming from just the organic demand heading into summer, and how much of this is really being driven by World Cup traveling?
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Scott Kirby8:10
You know, World Cup is a tiny, tiny piece of it. It really is the fundamentals of demand, and you see it everywhere. The demand is strong. People are still investing in experiences. I've told you before, like, to me, the economy we're a really good real time barometer. The economy feels stronger. The jobs report is consistent with, I wasn't that surprised by the jobs report because it looks to me like the economy is doing pretty well.
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Lisa Abramowitz8:37
Do you think that oil prices will stay at this level and continue to be a challenge at a time when every airline executive here expects it to go down almost except for you, but everyone expects the prices to go down.
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Scott Kirby8:46
I've thought for really since mid March that oil was gonna be higher for longer. I continue to think that at some point, I'll be wrong. It'll go down. But it's just hard for me to see any kind of outcome that the straits get reliably and sustainably open. They may open for a little bit, but just the dynamics make it hard for me to think that that's going to happen. So I think this kind of 90 to $110 a barrel, what do I know? I'm airline CEO, but we're planning for that sort of for the indefinite future, that 90 to $110 level.
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Lisa Abramowitz9:20
Coming into this conflict, the baseline assumption was that if prices got to that level, didn't stay at that level, there'd be bankruptcies. You'd have a lot of difficulties in the airline industry, and certainly there have been pressures. But the resilience of the consumer and the ability to absorb pricing has surprised everybody. Do you think that that will be the likely response to a persistently high oil price? Not necessarily people going out of business, but airline ticket prices going up and staying up.
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Scott Kirby9:43
Yeah. I think airline prices the consumer has been even more resilient. I thought the consumer would be resilient. It's been more resilient than I thought the consumer would be. So I think that will happen. But I also think, you still look around, United and Delta and Southwest, by the way, are all three gonna be solidly profitable this year. My guess is at all 90 to a 110, everyone else is losing money, some a lot of money. That means there's a big chunk of those route networks. If you're losing money overall, there's a big chunk that's losing a lot of money. My guess is the longer this plays out, the more and more it pushes executives to make hard decisions that they would rather not make, to just stop flying places and lose money.
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Lisa Abramowitz10:21
Going forward, is there any place that you wanna be expanding in? Just to sort of wrap it up in our lovely beach here that we're sitting at in Rio.
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Scott Kirby10:27
Yeah. We look forward to expanding really around the globe. A lot of our growth has been international. It slowed down this year, partly because Boeing's been behind on Wi-Fi deliveries are starting to catch up, but we're looking for, international has been great for us. United was born on third base for international with hubs in Newark, which is the best Pacific Gateway. San Francisco, best Pacific Gateway, Newark Atlantic. Dallas is probably the second best Atlantic gateway. So international has just been gangbusters for us, and we're opening up, it's crazy to me. Our team is opening up cities that and I'm pretty informed that I didn't actually know that city name then.
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Lisa Abramowitz11:06
Scott Kirby, always wonderful to speak with you. Scott Kirby, the CEO of United.